By Siboniso Mawandla
Public Protector Busisiwe Mkhwebane will not oppose the South African Reserve Bank’s (SARB) review application following her report in which she called for the constitutional mandate of the bank to be changed.
In a statement issued on Monday, Mkhwebane’s spokesperson Cleopatra Mosana said the Public Protector, having considered the legal advice from the Senior Counsel and which she accepted, will not oppose the SARB’s review application.
The SARB filed the application at the North Gauteng High Court on Tuesday June 27, following Mkhwebane’s remedial action. She ordered that the portfolio committee on justice and correctional services initiate a process to change the constitutional mandate of the Reserve Bank.
In her report, the Public Protector found that an amount on R1.125bn was an illegal gift to Bankorp/ABSA Bank and the matter was referred to the Special Investigation Unit (SIU) to approach the President to “re-open and amend the proclamation of May 1998, in order to recover misappropriated public funds unlawfully given to Bankorp/ABSA Bank,” the statement read.
“Subsequent to the issue of the aforesaid report, the SARB instituted an urgent High Court application to review and set aside of paragraph 7.2 of the Report essentially dealing with the proposed amendment of the constitutional mandate of the SARB.”
The Public Protector filed her answering affidavit in respect of SARB’s judicial review application in which she explained the reasons for arriving at the remedial action.
She contends that the mandate of the SARB is narrowly stated in section 224(1) of the Constitution, as there are central banks in other countries that have relatively multiple or broader mandates, such as to include, as primary objects and not as consequential or secondary objects, the promotion of full employment (job creation) and balanced economic growth, or other socio-economic objectives.
She further explains that the US central bank is one such example, including central banks of China, India and the United Kingdom which have additional mandates other than just price or currency stability.
In her view, such a failure to assess the other socio-economic objectives were probably enabled, and could continue to be enabled, by the narrowly stated mandate of the SARB.
“If left unchanged or reviewed, this narrowly stated mandate could continue to enable decisions to be taken that prejudice the socio-economic interests of ordinary South Africans, including as to the realisation of full employment or job creation.
“It was for this reason that the Public Protector considered that a possible review and broadening of the SARB mandate would provide a long-term effective remedy to possible prejudicial decisions by the SARB underpinned by the narrowness of its mandate.